Institutionalized Hysteria - Take 2

Back on February 22 - it seems a long time ago - I published a blog criticizing US attitudes in general towards "illicit" drugs. Today the news releases indicate further softening in these attitudes at least towards marijuana. The Department of Justice announced that it would not prosecute marijuana dispensaries in the 14 states where they are legal. Not to give away the store, the announcement went on to say that fraudulent dispensaries and criminal distributors would still be prosecuted. In states where medicinal use of marijuana has been legalized, the growth of dispensaries has been amazing. Obviously there are suppliers who are now legal, assuming their output is strictly for medicinal use. The article, at least in the Washington Post, stated that over half of the profits of the Mexican drug cartels comes from the trade in marijuana so legal dispensaries are not good news.

Interestingly enough a couple of weeks ago there was another article in the Post about the increase in US domestic supply of marijuana driving down the international price for the weed, substantially cutting into foreign dealers' profits. One counter effort by them has been to contract production in the US. They set up a growing facility, supply all the inputs, and contract with an individual, often a Mexican, to deliver a usable crop in something like four months.

The workings of the market place are a wonder to behold. What would happen if marijuana were decriminalized and taxed instead? There would be, I suspect, a bit of chaos on the production side as growers came out of the shadows and open competition began to affect quality, price and distribution. Getting all the producers to be nice and pay taxes might prove a bit tricky, but like Al Capone they could be prosecuted for tax evasion and, importantly, the money would stay in country given an underlying assumption that domestic production can be cost effective and that a tariff on imports would offer protection. Think of the positive effects decriminalization would offer: a) it would sharply reduce income of foreign producers, especially the Mexican cartels which can only be of great social benefit to Mexico; b) it would generate revenue for both federal and local uses if the tax structure were developed properly, substituting for a declining "sin tax", taxes on tobacco; and, c) it would free up a lot of effort on the part of law enforcement, especially the DEA, in trying to inderdict the flow of marijuana, a task in which they have mostly failed. It could even lead in a decline in the budget and employment in the DEA, freeing up money for drug treatment programs and research.

Another hint of the softening of attitudes is yet another legislative attempt in Congress to eliminate the discrepancy in sentencing between those convicted on cocaine possession in powder form (mostly white) and those using crack (mostly black). Given the financial crisis facing the states, anything that will reduce the prison population without necessarily affecting public safety can only be helpful.

As to the argument that legalizing marijuana will expand its use, my understanding is that use has been stable or declining in recent years. I would think that its presumably greater availability if legalized would in terms of demand be countered by its loss of cachet as a blow against the establishment. How can you be a rebel using something that's legal?

In any event, the economic gains alone from decriminalization make it a no brainer in my book. I trust that this time common sense and relaxed attitudes will overcome hysteria.